On Tuesday, Extra Space Storage Inc. (EXR) reported fourth quarter earnings, and it reaffirmed why it’s one of my favorite stocks on the market right now.
For those of you who aren’t already familiar with it, Extra Space Storage is a real estate investment trust (REIT) that also owns and operates self-storage facilities. In fact, it currently owns and/or operates 1,170 self-storage properties across 36 states, Washington D.C. and Puerto Rico. This covers a grand total of 787,000 units and 87.1 million square feet of rentable storage space. Plus, along with its storage units, Extra Space Storage also offers places for customers to store boats, RVs and more.
And this business model is currently paying off in spades. After market close yesterday, Extra Space Storage announced earnings results that topped the consensus estimate. The company reported that adjusted funds from operations (FFO) increased 27.9% year-over-year to $0.87 per share, which beat analysts’ estimates for $0.76 per share, giving at a 14.5% earnings surprise. Same-store revenue also jumped 9.6% year-over-year. And during the quarter, Extra Space Storage acquired six operating stores, completed the construction of three other stores, and paid a $0.59 quarterly dividend.
For full-year 2015, Extra Space Storage announced that adjusted FFO rose 19.9% year-over-year to $3.13 per share. Same-store revenue increased 9.3%. The company also reported that it acquired a total of 166 operating stores and completed construction on five more stores during 2015. Plus, its third-party management portfolio increased by 88 stores, which meant the company ended the year with a total of 348 stores.
Looking ahead to full-year 2016, Extra Space Storage is expecting adjusted FFO between $3.65 and $3.73 per share, and it also looks for same-store revenue to expand between 6.5% and 7.5%. This is in line with analysts’ current estimates for FFO of $3.70 per share.
Add it all up, and you can see why Extra Space Storage shares jumped at the closing bell yesterday to give the company a massive 30% stock-price increase over the past 12 months. This is all good news for my members, and it’s also why Extra Space Storage maintains an A-rating in my Portfolio Grader tool, making it a Strong Buy.